US could expand 3pc if budget resolved fast: Lacker

The US economy could expand 3 per cent or more next year if Congress resolves disagreements over the budget before the end of this year, Richmond Federal Reserve Bank President Jeffrey Lacker said on Thursday.

At the same time, the absence of a resolution to the so-called fiscal cliff of expiring tax cuts and drastic spending reductions could lead to a small contraction in the economy lasting one or two quarters, Lacker cautioned.